The Growth Years
Beginning in the late 1960s, explosive growth became the norm at Reser's.
Jerry Reser, Al's cousin, remembers the company's move into tortillas. "When I started running the tortilla line in 1968, most of the tortillas were available to the consumer as canned or frozen. Reser's was the first company to produce and sell fresh tortillas in the Northwest."
"Within a few years, we were out of tortilla capacity in Beaverton. In 1996 we acquired 50% ownership of La Siesta Mexican Food in Topeka, Kansas, and moved all production to that plant. Then in 1997, Reser's formed a partnership with La Burrita in Medford, Oregon, to produce our corn tortillas for the Western United States."
The move was significant for two reasons, Jerry explains. First, it meant Reser's tortillas were much fresher because they were shipped 200 miles instead of 2,000. It was also the first step toward an Hispanic tortilla. Until the partnership with La Burrita, Reser's had been making Anglo-type tortillas, Jerry says. "We were pretty much marketing and selling the product as Anglos to Anglos without really understanding the Hispanic following of the product."
In 1997, Reser's entered into a strategic partnership with Don Pancho. Today Don Pancho makes most of our corn and flour tortillas for the Western United States in their plants in Salem, Oregon, and Yakima, Washington.
"Tortillas are a huge category," Jerry points out. "The Hispanic population is increasing rapidly. We're positioned to meet this growth."
By 1989, the Jenkins plant had reached full operating capacity for salad. This situation was temporarily remedied through the purchase of Salad Host in Corona, California.
The acquisition happened quickly, Darrell recalls. "We bought it to tide us over the summer and meet demand. Mark had just come off route sales and was working second shift in the plant when we bought Salad Host. We sent him to Corona after four months of training at Jenkins."
"I went down with a team to help convert processing over to some of our items and never came back," Mark remembers with a grin. "I went for two weeks. A month later, I called my wife and said, 'We're moving to California.' I ran the plant for about a year.
"It was a significant move for us from a manufacturing standpoint," he continues, "because it took us out of Oregon. We had been selling outside of Oregon for many years, but everything was manufactured here. The Salad Host acquisition changed that."
In 1991, that changed even more with completion of the 50,000-square-foot Topeka, Kansas, plant. Mark moved a small crew from Corona to Topeka and we started production nine months from the time we broke ground.
"We needed to be able to service the South and Midwest better," Darrell says, "and the Jenkins plant was maxed out."
Tony Kunis, current Topeka General Manager, remembers, "We began with 35 employees in one production facility, and now we have 700 in four facilities, so we obviously picked a great growth area."
1991 was also the first year Reser's moved into refrigerated potatoes.
"We had a large plant in Topeka and business was very seasonal-there's lots of salad business in summer but it slows down in winter," Mark remembers. "We just started experimenting with cooking different kinds of breakfast potatoes: diced, sliced,and shredded."
"We bought Mrs. Weaver's Salads in Memphis and transferred the operation to Topeka," Mark says. "We also expanded the plant with what we called a protein room, where we process chicken and ham salads, and we added a distribution center. Now we had salads, protein items, and hash browns, and they were all growing."
By 1994, Mark remembers, Reser's was at a business crossroads.
"We had to decide what we were going to do with the refrigerated potato business. We had to decide whether we were going to get in it and grow or get out of it. We decided to add 80,000 square feet to the plant and grow." That was 1995.
Success followed. "We had 80 to 100 percent growth in the first couple of years," Mark recalls.
"By 1995," Mark says, "we had four plants in Topeka and about 500 employees. We were into Mexican food and had built our new potato plant. By 1998, we had gone from zero refrigerated product lines to about 56 million pounds."
With the Topeka plant nearing capacity in 1998, Reser's began a site search for a new refrigerated potato processing plant. The Pasco, Washington, plant opened in April 1999.
The quest for industry leadership was not limited solely to plants and product lines. Al expanded and strengthened his staff.
Director of Marketing Don Graff arrived in 1992 when Al decided the company needed a formal Marketing Department.
"Until then," Don explains, "marketing was done by employees. Purchasing Department people did package design because they ordered packaging. Members of the Research and Development and Product Development departments created sales materials because they knew more than anyone about the products. Al and the senior sales managers did advertising and promotion because they knew the most about selling."
Don's job was to bring the concepts of packaged food marketing to Reser's.
One major, ongoing project for which Don has been responsible is a sweeping change in the company's graphic image. The impetus was federal legislation in the early 1990s requiring nutritional labeling on all packaged retail grocery products. Some Reser's products already carried labeling, others didn't. Don saw the opportunity to position the company as a national-rather than a regional-manufacturer and distributor of high-quality refrigerated foods.
"We were required to change every product package, and that gave us the opportunity to develop a comprehensive look consumers would recognize across all our product lines. By 1995, the transition was complete. We had new packaging, business cards, letterhead, truck decals, everything. The new graphics were everywhere, including magazine ads and TV ads. The change moved us into an expanding and exciting new image for the company.
"One thing that didn't change in the redesign was the tulip that symbolizes the Reser family's Dutch heritage. We repositioned it and incorporated it into the new graphics. And we made a similarly careful change with sales materials. Where they had been fact sheets, they are now selling tools that describe benefits for the customer.
Ron Leeper, Director of Canadian Sales, was another person instrumental in Al's plans for a bigger, better Reser's. Ron joined the company in 1980 as a Route Supervisor and was named Vice President of Sales in 1983. In 1996, he accepted a new challenge-growing Reser's business in Canada.
"We started our Canadian business in the mid-1980s," Ron says, "but the Regional Sales Manager didn't really have time to develop it. We did most of our business through brokers. When Al decided to emphasize Canadian business in 1996, we already knew people there, we hit the ground running, and we've been successful. We doubled Canadian sales between 1996 and 1999, and I expect growth to continue at 10 to 15 percent a year. In the beginning, we got business through new accounts. Now we're working to grow our existing customers with more products and more varieties of products."
Since joining Reser's in January 1999, Vice President of Sales and Marketing Peter Sirgy has spearheaded another significant change-separating the sales force into retail and food service divisions so Regional Sales Managers and salespeople have exclusive responsibility for one side of the business or the other.
"Reser's has grown to such a degree that we needed a channel focus," Peter explains. "Before, salespeople in a geographic area called on every customer regardless of whether the customer was a restaurant operator, a food service distributor, a military base, a grocery store, or a vending operator. It's hard to be an expert at everything, so now we have salespeople who are experts in specific areas. They can provide better customer service and can truly partner with their customers. I expect our customers to become increasingly reliant on our people as a result of the change.
"It's an extension of Al's philosophy about customers. Al believes you don't just get customers; you build relationships and make friends. If you just get customers, you can lose them. If you build relationships, you keep friends. We're building relationships."
Paul Leavy considered Al's job offer "about an hour" before joining the company in July 1995 as Chief Financial Officer and Treasurer. He knew Reser's well because the company had been a client when he was an accountant for Coopers & Lybrand in Portland.
"This is a dynamic company," Paul says. "It's a company determined to be the leader in the industry. We will continue to grow the business, and we will do that through acquisitions, expansion, and new product lines."
Reser's is earning a reputation for being an industry consolidator, and Paul says the management team knows how to make successful acquisitions.
"We get inquiries all the time," he says. "We look at 20 and buy one or two. We're careful going in. Is it a good fit for us? Does it make sense? Is it an industry we know something about? Why does the seller want to sell?
"Once we make the purchase, we spend a lot of time making sure issues involving people, accounting, production, traffic, and customer service are taken care of. We do that because we want the whole transition to be seamless from the customer's point of view. Or we want the customer to say, 'Wow! This is a good deal.' That's our goal-either seamless or better for the customer."
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